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Stock-Based Compensation | 12 Months Ended
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Mar. 31, 2026
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Stock-Based Compensation The Board of Directors has adopted and the stockholders have approved three stock option award plans. The 2010 Thermon Group Holdings, Inc. Restricted Stock and Stock Option Plans ("2010 Plan") was approved on July 28, 2010. The plan authorized the issuance of 2,767,171 stock options or restricted shares (on a post stock split basis). On April 8, 2011, the Board of Directors approved the Thermon Group Holdings, Inc. 2011 Long-Term Incentive Plan ("2011 LTIP"). The 2011 LTIP made available 2,893,341 shares of the Company's common stock that may be awarded to employees, directors or non-employee contractors' compensation in the form of stock options or restricted stock awards. On May 21, 2020, the Board of Directors approved the Thermon Group Holdings, Inc. 2020 Long-Term Incentive Plan ("2020 LTIP"). The 2020 LTIP made available 1,400,000 shares of the Company's common stock that may be awarded to employees, directors, or non-employee contractors' compensation in the form of stock options or restricted stock awards. Collectively, the 2010 Plan, the 2011 LTIP, and the 2020 LTIP are referred to as the "Stock Plans." Accordingly, the vesting of restricted stock units and performance stock units and the exercise of stock options result in the issuance of additional new shares of the Company's stock. For fiscal 2026, 2025, and 2024, we recorded stock-based compensation of $8,244, $5,244, and $5,754, respectively. Unvested options outstanding are scheduled to cliff vest over three years with 100% vesting on the third anniversary date of the grant. Stock options must be exercised within 10 years from date of grant. Stock options were issued with an exercise price which was equal to the market price of our common stock at the grant date. We account for forfeitures as they occur, rather than estimate expected forfeitures. Stock Options A summary of stock option activity under our Stock Plans for fiscal 2026, 2025, and 2024 is as follows:
|  |  | Options Outstanding
|  |  | Number of Shares |  | Weighted Average Exercise Price
Balance at March 31, 2023 |  | 74,366 |  | $ | 16.33 |
| Expired |  | — |  |  | — |
Balance at March 31, 2024 |  | 74,366 |  | $ | 16.33 |
| Exercised |  | (33,573) |  | 18.83 |
Balance at March 31, 2025 |  | 40,793 |  | $ | 14.28 |
| Exercised |  | (5,074) |  | 14.28 |
Balance at March 31, 2026 |  | 35,719 |  | $ | 14.28 |
For fiscal 2026, 2025, and 2024, the intrinsic value of stock option exercises was $183, $303, and zero, respectively. As of March 31, 2026, there was no unrecognized expense related to unvested stock option awards. The following table summarizes information about stock options outstanding as of March 31, 2026:
|  | Options Outstanding |  | Options Vested and Exercisable
Exercise Price |  | Number Outstanding |  | Weighted Average Contractual Life (Years) |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value at March 31, 2026 |  | Number Vested and Exercisable |  | Weighted Average Contractual Life (Years) |  | Weighted Average Exercise Price |  | Aggregate Intrinsic Value at March 31, 2026
$14.28 |  | 35,719 |  | 4.2 |  | $ | 14.28 |  |  | $ | 1,290 |  |  | 35,719 |  |  | 4.2 |  | $ | 14.28 |  |  | $ | 1,290 |
The aggregate intrinsic value in the preceding table represents the total intrinsic value based on our closing stock price o f $50.40 as of the last business day in the fiscal year ended March 31, 2026, which would have been received by the option holders had all option holders exercised as of that date. Stock options are valued by using a Black-Scholes-Merton option pricing model. We calculate the value of our stock option awards when they are granted. Accordingly, we update our valuation assumptions for volatility and the risk-free interest rate each quarter that option grants are awarded. Annually, we prepare an analysis of the historical activity within our option plans as well as the demographic characteristics of the grantees of options within our stock option plan to determine the estimated life of the grants and possible ranges of estimated forfeiture. The expected life was determined using the simplified method for estimating expected option life for awards that qualify as "plain-vanilla" options. The risk-free interest rate is based on the rate of a zero-coupon U.S. Treasury instrument with a remaining term approximately equal to the expected term. We do not expect to pay dividends in the near term and therefore do not incorporate the dividend yield as part of our assumptions. Director Awards and Restricted Stock Units We issue fully vested common stock in lieu of restricted stock awards to our non-executive directors. Also, we grant restricted stock units to certain employees. For all employee awards of restricted stock units, we do not issue common shares until the vesting period is completed. The Company allows participant employees to withhold a portion of their restricted stock units upon the vesting dates in order to satisfy their tax obligation. For both the non-executive director common stock awards and restricted stock units to employees, fair value is determined by the market value of our common stock on the date of the grant. During fiscal 2026, 2025, and 2024 we issued 20,526, 21,940 and 22,829 fully vested common shares to directors which had a total fair value of $615, $665, and $695 based on the closing price of our common stock on the date of issuance, respectively. As of March 31, 2026, there were no outstanding restricted stock awards. The following table summarizes the activity with regard to unvested restricted stock units issued to employees during fiscal 2026, 2025, and 2024.
Restricted Stock Units |  | Number of Shares |  | Weighted Average Grant Fair Value
Balance of unvested units at March 31, 2023 |  | 336,254 |  | $ | 16.12 |
| Granted |  | 135,963 |  | 23.26 |
| Released |  | (176,813) |  |  | 15.12 |
| Forfeited |  | (3,590) |  |  | 20.57 |
Balance of unvested units at March 31, 2024 |  | 291,814 |  |  | $ | 20.00 |
| Granted |  | 122,730 |  |  | 32.13 |
| Released |  | (132,365) |  |  | 18.94 |
| Forfeited |  | (22,507) |  |  | 22.03 |
Balance of unvested units at March 31, 2025 |  | 259,672 |  | $ | 26.10 |
| Granted |  | 145,490 |  | 25.64 |
| Released |  | (136,045) |  | 21.34 |
| Forfeited |  | (12,670) |  | 26.79 |
Balance of unvested units at March 31, 2026 |  | 256,447 |  | $ | 26.97 |
Based on our closing stock price of $50.40, the aggregate intrinsic value of the unvested restricted stock units at March 31, 2026 was $3,948. Total unrecognized expense related to unvested restricted stock units was approximately $4,051 as of March 31, 2026. We anticipate this expense to be recognized over a weighted average period of approximately 1.6 years. Performance Stock Units During fiscal 2026, 2025, and 2024, performance stock unit awards were issued to our executive officers and other members of management and had total estimated grant date fair values of $2,827, $2,277 and $2,547, respectively. For the fiscal 2026 awards, the performance indicator for these awards is either the Company's Adjusted EBITDA or return on invested capital ("ROIC"). The target number of shares is 58,687 and 50,302 for the Adjusted EBITDA and ROIC awards, respectively. We have legacy awards which utilize the stock price indicator to measure our stock price relative to a predetermined peer group of companies with similar business characteristics as ours. We refer to these awards as Relative Total Shareholder Return, or "RTSR" awards. Since these awards were market-based, we prepared a Monte Carlo valuation model to calculate the probable outcome of the market for our stock to arrive at the fair value. The fair value of the market-based units will be expensed over three years, whether or not the market condition is met. For those awards utilizing an Adjusted EBITDA indicator or the ROIC indicator, a target is established for each of the next three years from the grant date. Since these are performance-based stock awards, the Company will make estimates of periodic expense until the performance is known and the expense for actual number of shares earned is determinable. During fiscal 2026, the following performance was achieved: Adjusted EBITDA-based performance awards earned approximately 150% of target and the ROIC-related awards earned approximately 200% to be paid at vesting. During fiscal 2025, the following performance was achieved: Adjusted EBITDA-based performance awards earned approximately 84% of target, the RTSR awards earned approximately 200%, and the ROIC-related awards earned approximately 91% to be paid at vesting. During fiscal 2024, certain Adjusted EBITDA-based performance awards earned 82% of their target based on the Company's performance during the fiscal year, the RTSR awards earned approximately 106% of their target, and the ROIC-related awards earned approximately 200% to be paid at vesting. For performance stock units, the performance period will end on the third fiscal year end subsequent to the award being granted. It will then be determined how many shares of stock will be issued. In each year of the performance period, the possible number of shares will range from zero percent to two hundred percent of the target shares. The following table summarizes the target number of performance stock units outstanding and the minimum and maximum number of shares that can be earned as of March 31, 2026.
Fiscal Year Granted | Target |  | Minimum |  | Maximum
Fiscal 2024 | 100,180 |  | — |  | 200,360
Fiscal 2025 | 67,373 |  | — |  | 134,746
Fiscal 2026 | 108,989 |  | — |  | 217,978
In fiscal 2026, 2025 and 2024, the performance objectives for 150,143, 87,972 and 141,608 awards, respectively, were earned. At March 31, 2026, there was $2,514 in stock compensation that remained to be expensed related to performance stock units, which will be recognized over a period of 1.6 years.

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